North America couldn’t catch a break in 2017. Parts of the United States were on fire, underwater or lashed by hurricane winds. Mexico shook with back-to-back earthquakes. The Caribbean got hit with a string of hurricanes.

The rest of the world, however, fared better. Preliminary research shows there were fewer disasters and deaths this year than on average, but economic damages were much higher.

While overall disasters were down, they smacked big cities, which were more vulnerable because of increased development, said economist and geophysicist Chuck Watson of the consulting firm Enki Research.

In a year where U.S. and Caribbean hurricanes caused a record $215 billion worth of damage, according to insurance giant Munich Re, no one in the continental U.S. died from storm surge, which traditionally is the No. 1 killer during hurricanes. Forecasters gave residents plenty of advance warning during a season where storms set records for strength and duration.

“It’s certainly one of the worst hurricane seasons we’ve had,” National Weather Service Director Louis Uccellini said.

The globe typically averages about 325 disasters a year, but this year’s total through November was fewer than 250, according to the Center for Research on the Epidemiology of Disasters at the University of Louvain in Belgium. They included flooding and monsoons in South Asia, landslides in Africa, a hurricane in Ireland, and cyclones in Australia and Central America. Colombia experienced two different bouts of floods and mudslides.

Lower tolls

Disasters kill about 30,000 people and affect about 215 million people a year. This year’s estimated toll was lower — about 6,000 people killed and 75 million affected.

Was it a statistical quirk or the result of better preparedness? Experts aren’t certain, but say perhaps it’s a little bit of each.

“This has been a particularly quiet year,” said Debarati Guha-Sapir, who heads the disaster research center. “The thing is not to be … complacent about this.”

But quiet depends on where you live.

The U.S. had gone more than a decade without a Category 3 storm or larger making landfall on the mainland. The last few Septembers — normally peak hurricane month — had been particularly quiet, but this year, Harvey, Irma, Jose and later Maria popped up and grew to super strength in no time, said Colorado State University hurricane researcher Phil Klotzbach.

“September was just bonkers. It was just one after the other. You couldn’t catch a break,” he said.

There were six major Atlantic hurricanes this year; the average is 2.7. A pair of recent studies found fingerprints of man-made global warming were all over the torrential rains from Harvey that flooded Houston.

Researchers at the University of South Carolina estimated that economic damage from this year’s disasters, adjusted for inflation, were more than 40 percent higher than normal, mostly because of Harvey, Irma and Maria. By many private measures, Harvey overtook Katrina as the costliest U.S. hurricane, but the weather service hasn’t finished its calculations yet.

Much of the hurricane-related damage and deaths in the Caribbean — from storm surge and other causes — is still unknown. The National Hurricane Center hasn’t finished tallying its data.

Uccellini of the weather service said warmer than normal waters and unusual steering currents made the hurricanes especially damaging, combined with booming development in disaster-prone areas. 

“We are building in the wrong places. We are building in areas that are increasing in risks,” said Susan Cutter, director of the Hazards and Vulnerability Research Institute at the University of South Carolina.

​Devastating wildfires

Wildfires blazed nearly year-round in the U.S., fanned by relentless winds and parched conditions. About 9.8 million acres of land have burned, mostly in the West, nearly 50 percent more than the average in the past decade. A wildfire that ignited in early December in Ventura and Santa Barbara counties northwest of Los Angeles grew to be the largest in California history.

Scientists connect drier weather after heavy rains — leading to buildup of fuel that can catch fire and burn easily — to a combination of man-made warming and a natural La Nina, the climate phenomenon that’s the flip side of El Nino, said Georgia Tech climate scientist Kim Cobb.

Worldwide, drought affected significantly less land and fewer people this year, and heat waves were less severe compared with those in the past.

Landslides were more frequent and deadlier this year, mostly because of the Sierra Leone landslide that killed 915 people, Guha-Sapir said.

Earthquakes worldwide were dramatically down. As of mid-December, there had been only seven earthquakes of magnitude 7 or larger compared with about 15 in a normal year. Two powerful quakes struck Mexico in September, including one that hit on the anniversary of the devastating 1985 Mexico City quake.

The back-to-back Mexico quakes were unrelated, said geophysicist Ross Stein of Temblor Inc., a company that provides information about seismic risk. 

“We have to remember that coincidences really do happen,” he said. 
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There were no fireworks on Wall Street for the last trading day of the year, as U.S. stocks closed out their best year since 2013 on a down note, with losses in technology and financial stocks keeping equities in negative territory for the session.

Major indexes hit a series of record highs in 2017, lifted by a combination of strong economic growth, solid corporate earnings, low interest rates and hopes for a tax cut from U.S. President Donald Trump’s administration.

The benchmark S&P 500 surged 19.5 percent this year, the blue-chip Dow 25.2 percent and Nasdaq 28.2 percent, as each of the major Wall Street indexes scored the best yearly performance since 2013.

The market has also remained resilient in the face of tensions in North Korea and political turmoil in Washington. The S&P 500 only saw four sessions all year with a decline of more than 1 percent while the CBOE Volatility index topped out at 15.96 on a closing basis, well below its long-term average of 20.

What will 2018 bring?

“The real question is what happens as we head into 2018,” said Sam Stovall, chief investment strategist at CFRA Research in New York. “There is an awful lot of optimism built into share prices right now that could set us up for disappointment.”

Among sectors, the technology index has been the best performer, up 37 percent and led by a gain of 87.6 percent in Micron Technology.

Telecom services, down 5.7 percent, and energy, down 3.7 percent, were the only two sectors to end the year in the red.

The rally is widely expected to extend into 2018, boosted by gains from a new law that lowers the tax burden on U.S. corporations.

Last day a down day

The Dow Jones Industrial Average fell 118.29 points, or 0.48 percent, on Friday to close at 24,719.22, the S&P 500 lost 13.93 points, or 0.52 percent, to 2,673.61 and the Nasdaq Composite dropped 46.77 points, or 0.67 percent, to 6,903.39.

For the week, the Dow lost 0.13 percent, the S&P 500 shed 0.36 percent and the Nasdaq lost 0.81 percent.

Apple declined 1.08 percent after issuing a rare apology for slowing older iPhones with flagging batteries.

Goldman Sachs lost 0.68 percent after saying its fourth-quarter profit would take a $5 billion hit related to the new tax law.

Amazon fell 1.4 percent after Trump targeted the online retailer in a call for the country’s postal service to raise prices of shipments in order to recoup costs.

Declining issues outnumbered advancing ones on the NYSE by a 1.46-to-1 ratio; on Nasdaq, a 1.91-to-1 ratio favored decliners.

The S&P 500 posted 36 new 52-week highs and no new lows; the Nasdaq Composite recorded 81 new highs and 20 new lows.

Volume on U.S. exchanges was 4.94 billion shares, compared to the 6.4 billion average for the full session over the last 20 trading days.
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When the 55-year-old woman stood up to speak at a meeting of shoemakers in south India earlier this month, she was seeing her employers for the first time.

She told them about the decades she had spent hunched up in her home, repeatedly pulling a needle through tough leather as she sewed shoe uppers, the meager income she earned, her failing eyesight and the wounds on her hands.

For manufacturers and brands, her story was a revelation.

The meeting brought women workers, manufacturers, charities and brands face-to-face for the first time in a bid to map the role of homeworkers – an “invisible workforce” in a global supply chain making high-end shoes – and improve conditions.

“It was a historical meeting in that sense,” said Annie Delaney of the Australian RMIT School of Management, who has documented the condition of homeworkers and attended the meeting a fortnight ago in Vellore in Tamil Nadu.

“Homeworkers described their reality. It was a powerful experience for not just the women but also for the manufacturers and brands who were meeting them for the first time.”

There are hundreds of thousands of women from poor, marginalized families who work for cash — stitching, embroidering and weaving at home to put the finishing touches to products that are sold globally, campaigners said.

Most of them are not recognized as formal workers so have no access to social security or fair wages.

Vellore district in Tamil Nadu is the hub of a growing industry in India producing leather footwear for export. In 2016, India exported 236 million pairs of shoes — up from 206 million in 2015, according to the World Footwear Yearbook.

It also has one of the highest concentrations of homeworkers in India – largely women hand-stitching uppers of leather shoes.

Identifying homeworkers​

While factories in the area employ people at higher salaries to assemble the shoes, manufacturers find it cheaper to outsource the labor-intensive process of stitching uppers to women who work from home, using middlemen, campaigners said.

The meeting saw Britain-based Pentland Brands – the first company to map homeworkers in its supply chain – share their interventions with other participating brands including UK-based Clarks and the Switzerland-based AstorMueller Group, according to a stakeholder who attended the closed-door meeting.

None of the companies were immediately available to comment.

Pentland, with annual sales of USD $3 billion across 190 countries, owns sports, outdoor and fashion brands including Berghaus and Speedo, and holds a majority stake of JD Sports.

Since 2016, Pentland has worked with nonprofit groups Cividep in India and Homeworkers Worldwide to identify homeworkers making shoes for them and is at present mapping their pay and hours worked to ensure better wages.

No one from Pentland was immediately available to comment on the initiative, which according to their website aims to provide direct employment to homeworkers, better training and to work with suppliers for sustainable improvement of labor conditions.

Cheap labor

Campaigners say homeworkers are paid by the piece and the exact number of hours they work are not tracked.

The women are paid less than $0.14 per pair of shoes, which are sold in Britain for between $60 and $140, according to a 2016 report by Cividep India and British nongovernment organizations Homeworkers Worldwide and Labor Behind the Label.

The report highlighted how the industry relies on homeworkers who earn less than the minimum wage, lack legal rights, and suffer from chronic headaches and body pain.

“Homeworkers have been under the radar for a long time,” Delaney said. “A start was made in Vellore to collaborate and ensure they get their dues.”
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President Donald Trump returned to a favorite target Friday, saying that the U.S. Postal Service should charge Amazon.com more money to ship the millions of packages it sends around the world each year.

 Amazon has been a consistent recipient of Trump’s ire. He has accused the company of failing to pay “internet taxes,” though it’s never been made clear by the White House what the president means by that.

In a tweet Friday, Trump said Amazon should be charged “MUCH MORE” by the post office because it’s “losing many billions of dollars a year” while it makes “Amazon richer.”

Amazon lives and dies by shipping, and increasing rates that it negotiated with the post office, as well as shippers like UPS and FedEx, could certainly do some damage.

In the seconds after the tweet, shares of Amazon, which had been trading higher before the opening bell, began to fade and went into negative territory. The stock remained down almost 1 percent in midday trading Friday.

Amazon was founded by Jeff Bezos, who also owns The Washington Post. The Post, as well as other major media, has been labeled as “fake news” by Trump after reporting unfavorable developments during his campaign and presidency.

He has labeled Bezos’ Post the, “AmazonWashingtonPost.”

The Seattle company did not immediately respond to a request for comment Friday. A spokeswoman for the Postal Service said, “We’re looking into it.”

Between July and September, Amazon paid $5.4 billion in worldwide shipping costs, a 39 percent increase from the same period in the previous year. That amounts to nearly 11 percent of the $43.7 billion in total revenue it reported in that same period.

In 2014, Amazon reached a deal with the Postal Service to offer delivery on Sundays.

Trump has also attacked U.S. corporations not affiliated in any way with the news media.

Just over a year ago, he tweeted “Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!”

Shares of Boeing Co. gave up almost 1 percent when trading opened that day, but recovered.

Several days later, and again on Twitter, he said that Lockheed-Martin, which is building the F-35 fighter jet, was “out of control.”  Its shares tumbled more than 5 percent, but they too recovered.  

The Postal Service has lost money for 11 straight years, mostly because of pension and health care costs. While online shopping has led to growth in its package-delivery business, that hasn’t offset declines in first-class mail. Federal regulators moved recently to allow bigger jumps to stamp prices beyond the rate of inflation, which could eventually increase shipping rates for all companies.

Amazon has taken some steps toward becoming more self-reliant in shipping. Earlier this year it announced that it would build a worldwide air cargo hub in Kentucky, about 13 miles southwest of Cincinnati.

Shares of Amazon.com Inc. slipped less than 1 percent Friday morning to $1,178.69. The Seattle company’s stock is up more than 57 percent this year and surpassed $1,000 each for the first time in April.
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Officials in the Philippines, one of Asia’s fastest growing economies, are planning a series of economic stimulus measures in 2018 to ease poverty and compensate for a lag in foreign investment.

Manila is building $169 billion in infrastructure, such as railways and an airport terminal, while toying with legal changes that would let foreigners own larger shares of localized businesses.

​Tax reform

In another major step, President Rodrigo Duterte signed into law this month the Tax Reform for Acceleration and Inclusion act. Tax revenue would pay for infrastructure and social services.

The idea is to create jobs and bring in foreign investment. Those outcomes would help sustain economic growth while giving the government funds to ease poverty that afflicts about a quarter of the population of 102 million.

“As the country builds for the future, there is the developing (of) social capital,” said Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in Metro Manila.

“Developing social capital eventually means these are your health, technical skills and education that are needed by individuals,” he said. “That’s part and parcel of the package.”

​Infrastructure and taxes

The World Bank forecasts 6.7 percent growth in the Philippine economy this year followed by 6.8 percent in 2018 and 2019. Much of the growth comes from overseas remittances, a boom in call-center jobs and consumption.

A cornerstone of Duterte’s economic policies is the “Build, Build, Build” program to replace decayed infrastructure through 2022 by adding the likes of railways and expressways.

By 2019, a small airport three hours north of Manila will open a new terminal to ease congestion in the capital, for example.

Officials hope new infrastructure will entice foreign factory investment that’s now deterred in part by transportation delays. Foreign investment makes up less than 3 percent of the economy now, lagging Asian peers such as South Korea, Taiwan and Vietnam.

The tax law signed by Duterte on December 19 is expected to generate $1.8 billion in revenues in its first year. It exempts tax payments for people earning less than the equivalent of $5,005 per year while shifting payment burdens to wealthier people and vehicle owners.

Congress received a bill in 2016 that would lower corporate taxes by 2 percentage points per year until they drop from today’s 30 percent, among Southeast Asia’s highest, to 20 percent.

“I think the way they are going about overhauling the tax code is clearly something that is somewhat path-breaking,” said Rahul Bajoria, a regional economist with Barclays in Singapore.

“They’re looking to tax the right set of individuals,” he said. “It kind of makes sense, and if they’re able to do the same with the corporate tax code, that would be a pretty significant achievement because the tax base itself is quite small.”

The government is also eyeing monetary policy changes to keep inflation in check, economists believe.

And in November Duterte told the National Economic and Development Authority Board to work on easing restrictions on foreign participation in certain industries where ownership is restricted.

Foreign companies, a potential provider of factory jobs for Filipinos, have held back investments because of those restrictions.

​Roadblocks

The government aims to cut poverty from 26 percent to 17 percent by 2020, according to the Ministry of Finance. But snags in the proposed economic measures could limit the jobs or funding needed to reach that goal, some fear.

Timelines for new infrastructure, which is paid in part by foreign aid, is catching attention now given the country’s budget deficit, Ravelas said. 

“What people are looking at now is how fast they are going to push the spending,” he said.

Infrastructure spending has grown from 5 percent of GDP in 2016 to about 7.45 percent now because of the surge in infrastructure construction.

But that program contributed to a 234.9 billion peso ($4.7 billion) budget deficit in the first 10 months of this year, 9 percent more than in the same period of 2016.

Economists still say Duterte is doing more than previous presidents to overhaul the economy and reduce poverty.

But past Philippine presidents have tried the same, particularly with infrastructure spending and tax reform, with little to show, said Renato Reyes, secretary general of the Bagong Alyansang Makabaya alliance of left-wing Philippine organizations.

His alliance advocates land reform instead of the government’s “neoliberal” policies.

“Previous presidents have had their own versions of the same economic stimulus programs, which did not really raise the livelihood of the ordinary folks, but it did contribute to making economic statistics look a little better,” Reyes said.
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In years past, demand for Apple Inc.’s latest flagship phone was critical to the company’s results over the holiday shopping quarter. That dynamic might be changing, however, as Apple’s widening lineup of devices and services more than makes up for any tepidness in demand this quarter for its lead product, the $999 iPhone X.

On Tuesday, Apple’s stock fell 2.5 percent to $170.57 after Taiwan’s Economic Daily and several analysts suggested iPhone X sales in the fiscal first quarter would be 30 million units, 20 million fewer than initially planned by the company.

The cut in the forecast was not confirmed, and the stock regained ground Thursday, hitting $171.82 by midday. The mean revenue estimate for the holiday quarter among 30 analysts remains at $86.2 billion, near the high end of Apple’s forecast of $84 billion to $87 billion.

Apple declined to comment.

Part of the support for Apple may reflect a change in its business strategy.

Releasing two new models and keeping older ones have made

Apple less dependent on its flagship product. Apple shareholder Ross Gerber, chief executive of Gerber Kawasaki Wealth and

Investment Management in Santa Monica, California, said the higher price and better margins on the iPhone X would reduce fears of a sales decline.

Eye on combined sales

“We know that Apple’s strategy was different this quarter by releasing two phones, the iPhone 8 and the iPhone X, and I think combined sales will be in line with what people expect,” Gerber said.

Apple also has fattened its portfolio of accessories and other devices, from its AirPods wireless headphones to a new Apple Watch with cellular data features.

While none is a runaway hit, collectively they are an important contributor, with Apple’s “other products” segment growing 16 percent to $12.8 billion last year. Customers who buy those add-ons are also likely to buy services from the App Store and Apple Music, part of Apple’s services segment, which grew 23 percent to $29.9 billion last year.

“Ultimately, it will be this multidevice ownership” that will generate further revenue, said Carolina Milanesi, an analyst with Creative Strategies.

IPhone X sales still matter. Each unit generates nearly twice the revenue of an iPhone 7 and contains technologies like facial recognition that burnish Apple’s brand.

Bob O’Donnell of TECHnalysis Research said “hit products” still represent “an enormous amount of the company’s overall value.”

“Will it take hold in the mainstream? That’s the question that still remains,” he said.
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By 2020, China could become the world’s second-largest wine consumer, behind the United States, according to a report by Vinexpo, a leading wine exhibition.

“Nowadays, many people in China have given up Baijiu, no more Baijiu,” says Jiawei Wang, a Napa Valley visitor from China, referring to his native country’s traditional grain-based spirits. “Because wine has enough alcohol, but it’s also good for health. It can soften humans’ blood vessels. People are changing.”

Wang is not alone. Chinese are visiting Northern California’s Napa Valley wine region in numbers never seen before.

“It’s interesting because the Chinese market in Napa is the fastest growing international market that we have, according to the statistics from Visit Napa Valley, our visitor bureau here in Napa Valley,” says John Taylor of Yao Family Wines. “China was the number one international market in the Napa Valley last year, composing, I think, about 5.5 percent of total visitation to the valley.”

A must-see stop for Chinese tourists is the Yao Family Wines vineyard, which is owned by retired basketball star Yao Ming. Yao’s celebrity aside, his wines have won praise from wine critics.

“The Cabernet Sauvignon is very nice,” says Wang. “It tastes great.”

About an hour’s drive to the east, the University of California-Davis has one of the country’s top programs for the science of growing grapes and wine making.

“From what I can see, there were not many Chinese students previously,” says Shizhang Han, a Chinese student in the UC-Davis program, “but now in my class and also among those who came after me, there are many more Chinese.”

The Chinese students believe that the wine industry has a promising future in their homeland.

“In Asia, especially in China, people are getting richer,” says student Heigi Wan. “This is one factor.”

“Wine in China is just starting,” says Han. “Before, we imported a lot of wine. And now we start to build new vineyards. The grape vines are still growing. It’s like a newborn baby. Chinese wine carries a lot of hope.”

Hope that has some of the UC-Davis students thinking that their first jobs might not be here in California’s wine country after all, but rather in an emerging wine industry back home in China.
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Despite initial concerns about an untested new leader, the world’s largest economy will end the year on a high note. The US economy is expanding at the fastest pace in more than two years, buoyed in part by low unemployment, soaring stock prices and a broad economic recovery around the globe. The momentum is expected to carry into 2018, but, as Mil Arcega reports, economists say the new year is likely to bring new challenges.
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